Public Bill Committee

[Ann Winterton in the Chair]

Ann Winterton: I see that members of the Committee are bright-eyed and bushy-tailed and longing to get on with our deliberations. Hon. Gentlemen may remove their jackets if they wish: that applies to all of our proceedings.

Clause 30

Crossrail access contracts: disapplying requirements for approval

Stephen Hammond: I beg to move amendment No. 49, in clause 30, page 20, line 37, after ‘Regulation’, insert ‘and other interested parties’.
I am sure that we will endeavour to live up to your strictures to be alert, Lady Winterton, and will make good law. The clause will remove the requirement for new access contracts to be approved by the rail regulator where they relate to a railway facility forming or to the principal Crossrail tunnel running through central London. The powers under the clause are exercisable by the Secretary of State, albeit after consultation with the Office of Rail Regulation about the terms of the contract.
The purpose of the amendment is to insert the words, “other interested parties”, after the word “Regulation”. While it is wholly appropriate that the regulator should be consulted in such a situation, other parties likely to be affected by the provision are excluded from the consultation. In particular, parties to the contract itself will have something to say on the subject. The amendment is designed to allow other interested parties to communicate with the Secretary of State before she decides to bypass the provisions of the Railways Act 1993 and allow an access contract to come into force without the approval of the regulator. While the motivation behind the clause is clear and I have no objection to it, I think that it would benefit from a more open and fair consultation under the amendment.

Tom Harris: Good morning, Lady Winterton. May I welcome you back to the Chair?
It is often advisable to start as one means to go on, but I will not do so this morning, because I intend to begin by more or less accepting the principle of the amendment. That pattern is not likely to be repeated throughout the rest of the day. The amendment requires consultation with interested parties on the terms of a proposed access contract for Crossrail services in the central tunnel that would not be subject to the ORR’s approval. There is nothing in the clause to stop the Secretary of State from consulting as she considers appropriate. The point of subsection (4) is to ensure consultation with the ORR, as the body with expertise and responsibility, on the terms of access contracts.
Although I do not think that it is absolutely necessary, the amendment does have some merit. The only reason that I ask the hon. Gentleman to withdraw it is that I would like parliamentary counsel to see the proposed wording to ensure that it is robust. If the hon. Gentleman agrees to withdraw the amendment, we will bring it back on Report and give it a fair wind.

Stephen Hammond: It is such a shame that the Minister does not propose to carry on in the same vein all day. He has rather knocked me off my feet by accepting, this early in the day, that one of our amendments would have a good effect. Given what he says, I am very happy for him to pass the wording on to parliamentary counsel and to bring back the proposal on Report. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Stephen Hammond: I beg to move amendment No. 50, in clause 30, page 20, line 40, at end insert
‘which shall be subject to annulment in pursuance of a resolution of either House of Parliament.’.
This is a probing amendment with the purpose of seeking a clarification from the Minister about the appropriate parliamentary procedure called into action by the clause. I may well have misunderstood that procedure, but I should be grateful for clarification. In other parts of the Bill where the Secretary of State exercises her powers by means of statutory instruments, such an instrument is subject to annulment by Parliament. That is not so in clause 30. As the Committee will be aware, statutory instruments may take one of three forms: some are passed by the affirmative resolution procedure, under which they must be approved by both Houses before they can become law; some are passed by the negative procedure under which they are merely laid before Parliament; and some are not laid before Parliament, but Parliament can annul them. The parent Act states in which form the relevant power should be exercised under parliamentary procedure. It would appear from clause 30(5) and (6) that the statutory instrument in question is to be laid before Parliament, but is not subject to annulment. Should I therefore assume that the appropriate procedure is the affirmative resolution procedure? If so, will the Minister explain why it is different from the other ways in which the statutory instrument is used in the Bill?

Tom Harris: Clause 30 enables the Secretary of State, by order, to remove the need for ORR approval to access contracts or amendments so that the Crossrail service can use the central tunnel or railway facility associated with it. It is essentially new infrastructure, specifically designed to carry Crossrail services, so a reserve power is appropriate to ensure that those services are not subject to approval. The Secretary of State would be required to consult the ORR on the terms of any contract to which the order relates.
In response to the hon. Gentleman’s question, the statutory instrument is not legislative in that respect, unlike the regulations that are made under clause 33, which are subject to annulment. However, the making of an order under clause 30 can reasonably be delegated to the Secretary of State, who would inform Parliament of such a measure. The Delegated Powers and Regulatory Reform Committee will look at the proposal and we will pay attention to any observations and recommendations that it makes. With those reassurances, I hope that the hon. Gentleman will withdraw his amendment.

Stephen Hammond: As I said at the outset, the amendment was very much of a probing nature, and I tabled it to understand exactly how the Government intend to use their powers. I listened carefully to the Minister, and I shall be interested to see what the Delegated Powers and Regulatory Reform Committee proposes. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 30 ordered to stand part of the Bill.

Clause 31 ordered to stand part of the Bill.

Clause 32

Power of Secretary of State to require entry into access contract

Stephen Hammond: I beg to move amendment No. 51, in clause 32, page 22, line 40, at end insert—
‘( ) Any person who suffers loss by the directions under this section shall be entitled to be compensated by the Secretary of State.’.
Clause 32 is another example of measures that we have seen consistently during the course of the Bill, in which the Government give themselves more power to direct the private sector to comply with the needs of Crossrail. As we have said before, this is an exceptional undertaking and, therefore, it is an exceptional Bill, which requires exceptional powers. We have said several times that such powers are often wholly necessary. We have seen such measures in previous Bills, as the Minister often reminded us last week.
However worthy the clause, I doubt whether the Minister will fail to reflect our amendment. Do the Government want to be seen to be digging up the centre of London without due regard to people maybe adversely affected by the project? I certainly applaud the exhaustive work done by the Select Committee in listening to the concerns of individuals and businesses on which the project will have an impact. For the same reason, I welcome the clauses providing for compensation to be paid to the railway asset operator, who may suffer financial loss as a result of Government intervention. We are therefore surprised and concern that there is no provision for compensation in the clause.
My amendment proposes that at the end of line 40 in clause 32, we insert the words:
“Any person who suffers loss by the directions under this section shall be entitled to be compensated by the Secretary of State.”
The clause enables the Government to force an owner of a railway facility to open it up for the purposes of constructing Crossrail. It provides that the ORR must approve the terms of any such imposed contract except, crucially, the terms relating to financial charges. In other words, the Government can demand to enter into an access contract with the facility operator but they can also decide how much they would pay for the privilege. The matter is apparently not open to negotiation, nor to independent scrutiny via the regulator, which strikes me as unfair.
The purpose of my amendment therefore is to ensure that facility owners do not suffer financial loss as a result of any Government intervention. If a facility owner is forced to enter into a contract with the Government under terms which mean that they get less than they would normally get for such a contract they should be appropriately compensated to make up the difference. As I said at the outset, I accept that a project of this nature requires the Secretary of State to take on certain exceptional powers, but I do accept that the private sector or the private citizen should necessarily suffer as the clause implies they will. I look forward to receiving some reassurance from the Minister.

Brian Binley: I, too, seek clarification from the Minister on the point made by my hon. Friend the Member for Wimbledon. The hybrid Bill Committee spent a lot of time making sure that people would be fully compensated and that compensation codes would be written into the whole Crossrail process. Indeed, we listened to many petitioners who thought that they were not as well supported respect as they should be.
The general thrust of the Committee’s work was that those people should be protected, and in our report to the House we made that point again and again. They think that the Government, not deliberately but often as a result of insensitivity, can roll over them without paying regard to their concerns or their need to be properly considered. I was proud to be a member of that Committee for that very reason, because our work was a perfect example of good government working in the way that it should. I should like to know whether the Government can demand to enter into an access contract with a facility owner and can decide, as my hon. Friend said, how much they will pay for the privilege. If they can take such action, it would run counter to the general thrust of the Select Committee, which would be a matter of concern.

Mark Field: May I associate myself with the comments made by my hon. Friends the Members for Northampton, South and for Wimbledon? There is likely to be a new regime on large-scale planning applications which the Government will wish to push through Parliament, and I do not want to prejudge the nature of the debate both in the House of Commons and in another place. However, I have some sympathy with the Government’s view that some large-scale developments, whether Crossrail, airport expansion or nuclear power sites, are vital construction projects, and we simply cannot allow the long public inquiries and enormous delays that affected similar developments in recent decades.
Obviously, one of the great difficulties is that we have a culture in the House that gives individuals the right to have their say. There is also a process of legal and sub-judicial inquiry. One of the attractive aspects of the French scheme—I accept that France has a completely different legal system—is the notion that certain projects are in the national interest. Of course, the flip side is that individuals who suffer receive compensation, no questions asked. In the case of Crossrail, that would be residents who live nearby.
The amendment, which I hope is helpful, at least begins to point in the direction in which I suspect the Government want to go with projects such as Crossrail. In other words, they wish to streamline the entire planning system, and I have some sympathy with that view. Clearly, we need to seek out precisely what is intended and we have always had an eye towards local opinion forming. However, the other side of that equation must surely be that those individuals whose rights are subverted in some way qualify immediately for compensation. The amendment, I hope, would at least provide a step towards that—a template that the Government must look at to ensure the balance between the protection of local desires, needs and rights and the broad interests of the country.
There is no doubt that the broad interests of London, the south-east and, indeed, the country require that Crossrail be built rapidly and to high specification, and that it be up and running at the earliest stage. However, there is little doubt that the lives of hundreds of thousands of people will be inconvenienced. In relation to clause 32, we are really discussing the extent to which the Secretary of State will take powers beyond those envisaged in the Bill. Those individuals who suffer should be fully compensated for whatever rights they have to forego in the public interest.
I hope that the Minister will give serious consideration to that point, even if he feels that the wording of the amendment is not quite right, because we need to get this important debate right if we are to ensure that the large-scale construction projects to which the House will be committed in the coming decades are built properly and to specification, but in a way that minimises the dissatisfaction of the many people who will suffer as a result.

Peter Soulsby: I have no doubt that the amendment is well intentioned, but I spent the best part of two years serving on the hybrid Bill Committee and, as the hon. Member for Northampton, South reminded us, that Committee spent a considerable time looking at issues of compensation and how land and property owners would be affected by Crossrail during construction and once it was operational.
We looked in considerable detail at those whose land and property might be taken for the Crossrail project, those who might be affected by the railway passing under their property and the extent to which the existing law and regulations would provide them with adequate compensation. In broad terms, we concluded that the compensation code, about which most of us knew very little when we embarked on the process, was widely based and appropriate for the overwhelming majority of situations that would emerge during construction. There were one or two particular examples to consider, such as the Smithfield market traders, who might not have got adequate compensation under the code due to a rather peculiar and long-standing arrangement for their leases, but that was very much the exception.
While I am sympathetic to ensuring that people get compensation, I can say that those Members who served on the hybrid Bill Committee were in general reassured that the ways in which the code would operate would be adequate for the overwhelming majority of circumstances. Therefore, the amendment is unnecessary. I hope that the Minister can reassure us that the clause is sufficient to ensure that the compensation code will apply in the circumstances that have been envisaged here and be more than adequate, as we concluded it will be, in other circumstances.

Tom Harris: I think that I can offer reassurance to all Members who have expressed concern about the clause. First, I draw their attention to the fact that it stands within the part of the Bill entitled “Railway matters”, which sets out a framework for the operation of Crossrail services following the construction of the Crossrail tunnel.
Subsection (1) states:
“The Secretary of State may give directions to a facility owner requiring him to enter into an access contract”.
The facility owner in that regard is the owner of the rail network—in other words, Network Rail is the intended facility owner. I can understand why colleagues may have thought that that wording referred to owners of private enterprises on the tunnel route, but that is not the intention of the clause.
Clause 32 deals with the situation in which agreement cannot be reached with the infrastructure owner for an access contract for Crossrail passenger services that for at least some of their journey use part of the central London tunnel. It makes use of the section 18 procedure under the 1993 Act for agreements that have already been negotiated, but the process is modified so that the ORR must approve the contract’s duration and the non-financial terms that address directions made by the Secretary of State.
The ORR will set appropriate financial terms for the access contract so that the infrastructure owner is appropriately paid for the access it provides. Clause 32 forces it to sell parts for use by Crossrail services, rather than selling them to another operator or leaving them fallow. If that requires contracts between the infrastructure owner and other operators to be amended, it is dealt with under clause 33, which considers compensation. As regards the payment of money between the rail owner and the train operator, the ORR must consider whether to undertake an access charge review, which would ensure that the access charges could be reset as necessary.
As to the payment of money between the Crossrail project and any affected train operators, I expect any further compensation necessary to be dealt with under the normal industry process or adaptations agreed with the ORR, as I explained at our last sitting in response to the debate on amendment No. 46.
Essentially, any existing operator that has to change its access to the existing rail network—not the Crossrail network—as a result of Crossrail services running will be forced to enter into a revised access charge regime. That means that, in the first instance, the existing operator will pay fewer or less access charges than it would normally pay without Crossrail services being there.
Further to that, if the operator suffers a loss of business economically as a result of losing a particular path to a Crossrail service, it will be up to normal industry procedures to ascertain what compensation has to be paid to that train operating company. That will be dealt with under clause 33 but according to normal accepted industry procedures, which have already been proved to work quite well.
Following that explanation, I urge the hon. Member for Wimbledon to withdraw the amendment.

Stephen Hammond: I listened carefully to the Minister—certainly to the latter part of his explanation on how there will be compensation under clause 33. However, I bring him back to the beginning of his speech and the fact that the facility operator post-construction is bound to be Network Rail. The intention is that it should be Network Rail.
It may be the intention for the facility to be one that is owned by Network Rail, but that is not what the Bill says. The Minister should therefore either agree to the Bill saying “Network Rail facility” or, if he intends the provision to be wider, accept my amendment. If he is not prepared to consider amending the Bill in that way, I shall test the Committee’s view on the amendment.

Tom Harris: I accept that “the facility owner” is an ambiguous term, but it has been recommended for the purposes of the Bill and, although I am speculating, given that Network Rail is currently the private owner of the infrastructure, I do not expect that situation to change at any point in the next 10 years during the construction of Crossrail. However, if it were to change, that would have a knock-on effect on the existing legislation. Simply to talk about the owner of the infrastructure is far less ambiguous than the hon. Gentleman suggests. However, if he is going to ask the Committee to vote on the amendment, I must challenge the premise, which he stated clearly, of compensating private owners along the route of the Crossrail tunnel during construction.
I have already made it quite clear that this part of the Bill refers to the operation of passenger services following the construction of Crossrail. The hon. Gentleman’s concerns about the lack of compensation arrangements for private owners who might be inconvenienced by construction do not apply in this case. I again urge him to withdraw the amendment.

Stephen Hammond: Again, I have listened carefully to the Minister. The amendment does not say anything about construction. It talks about the loss suffered by direction under this part of the Bill, if directed by the Secretary of State. It was the Minister’s presumption that it deals with construction. It could be relevant during construction, but it could also be relevant to the operational phase.
From our many visits to railway stations up and down the country, the Minister and I know that at a number of stations—I cannot think of one on the Crossrail route—Network Rail is the prime operator, but certain parts of the infrastructure around the station are owned by heritage groups and others. They might be the facility operator at some stage. To facilitate Crossrail, it might be necessary to use their lines and their paths.
The Minister seems to imply that compensation is in some way wrong. In the spirit of the Bill, we have accepted that exceptional powers are needed that will sometimes override the private interest for the public good, but that there should be some payment for that overriding. Therefore, I am not minded to accept his explanation unless he can reassure me that he has accepted that “facility owner” is an ambiguous term. Unless he proposes to clarify and redefine that matter on Report, I will test the will of the Committee on the amendment.

Tom Harris: I hope that this is the last time that I contribute to this debate. First, “facility owner” is the conventional term used in all rail legislation, and it has been used in previous rail legislation. Secondly, it is important to respect existing industry practices. Any conflict between train operating companies over pathways is already provided for in existing industry processes. It is not up to the Committee to start taking the existing processes to bits. They already have the support of all the train operating companies, the ORR, the Government and Network Rail.
The hon. Gentleman is in danger of taking the Committee into a vote on a misinterpretation of what the clause means. I absolutely agree with him that if the industry process did not already exist, it would be important for the Government and the Bill to make a point of ensuring that a compensation process did exist. However, as the industry processes already exist, and as the industry itself is not asking for any change to them, I fail to see the point of taking the issue to a vote. If he does so, I shall urge my hon. Friends to vote against the amendment.

Stephen Hammond: After the Minister replied and at the outset of my remarks, I said that we accept that there are normal industry processes and that those are dealt with under clause 33, as he also pointed out. This is a particular issue about a particular subsection. I listened carefully to what the Minister said. I shall withdraw the amendment, but give notice that we might table a similar proposal on Report. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 32 ordered to stand part of the Bill.

Clause 33

Amending existing access contracts: effects of contracts under section 32

Question proposed, That the clause stand part of the Bill.

Susan Kramer: I want to make some brief remarks. To someone sitting outside this room, our previous discussion would have sounded as though it was taking place at cross-purposes. My interpretation of the language is rather closer to the Minister’s than that of the hon. Member for Wimbledon, who sits on the Conservative Front Bench. However, the issue that has not been raised and which is relevant to the clause is the implications for freight and for freight rail access along routes it currently uses after Crossrail has come into play.
As I said earlier, the implications for London are extremely serious. London has no aggregate resources within its own boundaries and the only mechanism for bringing aggregate into London is freight rail. Those pathways need to be protected in some way. While there may be compensation for the freight rail provider, there is no mechanism for dealing with the problem that Londoners will face without the ability to bring in bulk product for a variety of purposes. The Minister should address that issue.

Tom Harris: I understand and sympathise with the hon. Lady’s concerns about freight as affected by Crossrail. Clause 33 is relevant if a direction has been made requiring the grant of access rights for Crossrail services outside the central London tunnel. However, I hope she will be reassured that there might then be the need for a further process of amendment of any other access rights that are in conflict. Clearly conflicting rights are likely to have been picked up and dealt with at earlier stages as a consequence of ORR oversight, subject to its new duty, and reviews of contracts under clause 27, but some could remain.

Question put and agreed to.

Clause 33 ordered to stand part of the Bill.

Clause 34

Effect on franchise agreements of directions under section 28 or 33

Stephen Hammond: I beg to move amendment No. 18, in clause 34, page 24, line 5, leave out ‘terminate the agreement’ and insert
‘instruct the Office of Rail Regulation to review the agreement and to determine how to vary it in light of those directions’.

Ann Winterton: With this it will be convenient to discuss amendment No. 19, in clause 34, page 24, line 9, leave out
‘Secretary of State has terminated the franchise agreement’
and insert
‘Office of Rail Regulation has acted’.

Stephen Hammond: We move on to a clause that deals with the impact of the Crossrail project on the existing railway franchise agreements. The amendments are very much in line with one another as they deal with exactly the same issue. The clause gives the Secretary of State the power to terminate a franchise if the parties to the franchise cannot agree on how it is to be modified to deal with the consequences of the Crossrail project, and only in those circumstances.
I can understand that some sort of external arbitration will be necessary if such a situation arises. After all, none of us wants the construction or operation of Crossrail to be held up by a disagreement between two sides to an existing franchise where that franchise agreement will have an impact on Crossrail. However, giving the casting vote in such a dispute to the Secretary of State is not necessarily the solution to the problem. The power to mediate in such disputes should be given to the ORR, which is transparently more of an independent and impartial expert body than the Secretary of State and so perfectly suited to carry out this role.
Amendment No. 19 would change the wording of subsection (3) so that instead of terminating the franchise himself, the Secretary of State will instruct the ORR to review the agreement and try to mediate to achieve an equitable solution. It would therefore revise a subsequent subsection to reflect the change made by amendment No. 18. I hope the Minister will look favourably on the suggestion that the Secretary of State should not mediate and that the ORR, as an impartial and expert body, should take on that role.

Tom Harris: Clause 34 deals with the consequences for franchises affected by the amendment of access rights held by the franchisee in order to facilitate Crossrail services. That may arise when, under clauses 28(2) or 33(2), the ORR directs amendments to access rights. If those amendments affect the carrying out of a franchise agreement, the parties to that agreement must use all reasonable endeavours to vary its terms. If they fail to agree, the Secretary of State can terminate the franchise agreement. The ORR can direct that compensation as payable and determine the amount. Amendment No. 18 and amendment No. 19, which would apply to the consequential changes, would remove the Secretary of State’s power to terminate the franchise agreements when agreement could not be reached between the parties and instead allow the ORR to vary the franchise agreement for the parties.
While I approve the spirit of the hon. Gentleman’s amendment, it is unsatisfactory for two reasons. First, it would place the ORR in a role completely outside its normal regulatory function. It does not regulate franchise agreements and has no experience in doing so, or in setting or writing the minimum specification for them. The hon. Gentleman suggested that it has expertise in that area. It does not.
Franchise oversight and construction lie with the Department for Transport, and lay previously with the Strategic Rail Authority. The functions of franchising and of overseeing access contracts are in practice well connected, but they are separate functions undertaken by separate bodies with separate responsibilities.
More importantly, the amendment would remove a necessary protection for the holder of the franchise. Agreement might not have been reached because the franchise holder considered that an amended franchise would not be a viable business proposition for him, so he would wish it to be terminated with compensation. In that case, it is far more satisfactory for the Secretary of State, who holds a franchising function, to terminate such an agreement with compensation and then refranchise the service. Therefore, following that explanation, I ask the hon. Gentleman to withdraw his amendment.

Stephen Hammond: It may well be that the ORR does not have the expertise, as the Minister described from first-hand knowledge, but in its function as a regulator it is an expert, independent and impartial observer. Many in the industry might prefer that that body conducted the franchise renegotiation process, rather than the Department for Transport, but that is a discussion for another day and I am not tempted to open it now.
I am interested in the Minister’s reference to an unintended consequence of my amendment being that it might affect the business viability of a franchise and, therefore, might undermine the ability of a franchise holder to terminate if a franchise became unviable and the ability to get compensation. That is certainly not a consequence that I had anticipated.
The spirit of the amendment is to look at a resolution where the access is purely to do with Crossrail. I could not envisage circumstances under which such a minor access arrangement would invalidate the whole franchise, but I am prepared to accept the Minister’s explanation that in certain cases it might, and, therefore, that protection should certainly be in place. Owing to that unintended consequence, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 34 ordered to stand part of the Bill.

Clause 35

Award of Crossrail franchises to public-sector operators

Question proposed, That the clause stand part of the Bill.

Stephen Hammond: The explanatory notes for the clause state that it disapplies the prohibition in section 25 of the 1993 Act on public sector operators being a franchisee in respect of passenger rail services. Section 25 of the 1993 Act effectively privatised British Rail and introduced, or was the forerunner of, today’s industry structure and provides that certain public sector bodies cannot be franchisees. Those bodies include Ministers of the Crown, local authorities and passenger transport authorities. For better or for worse, depending on how we look at it, it is a competitive system whereby private sector companies bid for and operate rail franchises. The question is, therefore, whether that system is working.
If the Department for Transport believes the system to be working elsewhere in the country, why should Crossrail be different? We all know the answer to that. The clause is so worded so that Transport for London can operate Crossrail, post-construction. That raises the question whether it is intended that the bidding process will see TfL as the sole bidder.
We all understand that that is what is intended by the Mayor, with his megalomaniac tendencies, writing blank cheques from Londoners’ bank accounts. Not necessarily every Londoner would agree with that statement. Perhaps we will hear this from the Minister, but as we understand it, the Mayor has just bankrolled the construction phase of Crossrail. However, should that automatically give him the right to operate it? After all, are we convinced that the Mayor is a good operator and are we clear that that would be in the public interest? Can we be sure that health and safety standards will be properly met?
If one examined the record of TfL in operating the underground, it would at best be described as patchy. TfL management likes to blame the infracos and everyone else, but the operating statistics of the underground show that some 40 per cent. of the delays are due to TfL and its inability to operate efficiently. Do we really want the major national project of Crossrail to operate with 40 per cent. inefficiencies? I am not sure that anybody wants that. Surely even the Mayor, who at best is economical with the truth at times, does not want that or wish to publicise it. [Interruption.] Hon. Members should read the June edition of “The Londoner” and they will see what I mean.
Can we be sure that it is in the public interest to have TfL as the constructor and the operator? Where are the checks and balances? If TfL, which blames anybody but itself for faults, has both roles, who will it blame? Would it not be amusing to see the operation arm of TfL blaming the construction arm? No, it would not, because the only people to suffer would be those who travel on Crossrail. The public purse would also suffer.
It looks as though the clause has been written in so that TfL will have the right to bid for this franchise. Is it to be an exclusive franchise? How long will it run for? Who else may bid? The franchise system that the Government have created allows for franchises of seven to 10 years. Is it intended that the Crossrail operating franchise will be of the same length? I suspect not.
I ask all those questions because the shadow Secretary of State for Transport, my hon. Friend the Member for Chipping Barnet (Mrs. Villiers), has intimated that we favour some reintegration of the network. TfL being the owner, if not the manager of the network and the operating model, could fit into a model of reintegration later on. However, it would not fit in with the Government’s current model of operation for the railways. I ask the Minister, is that what is intended in the clause? Is he now saying that he accepts that a degree of reintegration is viable, possible and desirable? In terms of this contract, is the clause just a Trojan horse for TfL? Is this an exclusive bidding procedure and for how long is the franchise intended to run?

Susan Kramer: I find that speech fairly fascinating because the Conservative Front-Bench team are trying to have it both ways. They want to talk in terms of much greater integration in the system and to propose that there should be barriers to integration. I also say to the hon. Member for Wimbledon that he should not be afraid. I honestly believe that the hon. Member for Henley (Mr. Johnson) will never be in a position to run this system.

Stephen Hammond: For the sake of clarity for the hon. Lady, I did not propose one thing or the other. I merely asked a number of questions. She should not infer any position from those questions.

Susan Kramer: I thank the hon. Gentleman for that clarification, which I find extremely curious, but let us move on. One of the most attractive features of Crossrail is its potential to integrate with London’s overall public transport provision. TfL has many flaws, but it has certainly delivered some significant improvements, notably the new London overground network.

Stephen Hammond: While the hon. Lady’s constituents may think that that has been of benefit, mine would not agree, because of the Mayor’s failure to deliver the east London line to Wimbledon.

Susan Kramer: I hope that the hon. Gentleman will get the services that he seeks in the Wimbledon area in future. With the London overground, there was a pattern whereby an extremely poor service provided by Silverlink was taken back into TfL control for a holding period while it was revamped, then refranchised to a private sector operator. I see no reason why those strategies cannot be responsibly used by TfL to provide Londoners with the most appropriate and effective service. The hon. Gentleman will know that the way in which TfL’s services are provided are a complete mixture; the buses, the docklands light railway, the overground and the tube all have different kinds of arrangements.
The hon. Member for Wimbledon’s fascination with private operators is somewhat questionable, given the hideous Metronet experience that we all have been through. Private operators can play an important role, provided that integration oversight and a general pattern of regulation are in place. To suggest that it is inappropriate to introduce a clause that allows such measures to proceed for Crossrail strikes me as extraordinary. Londoners will be fascinated by the implication that the new service should be exclusively in private hands, and not part of the broader TfL family as an integrated rail service in London.

Stephen Hammond: The hon. Lady is being party political and seems to have inferred all sorts of things from what I said—I wish that I had been as clever as she suggests. I actually asked whether the bidding process was going to be exclusive to TfL, and was really asking nothing more than that.

Mark Field: I shall make a brief contribution to probe the Government’s thinking. I am not a great defender of the Mayor, but he has been vindicated in many ways by what has happened on the underground. To a large extent he has been a passenger—perhaps it is the wrong time to say that. The public-private partnership exercise for the London underground has unravelled, and I am afraid that that is what the Mayor had in mind at the outset when he made his complaints about the nature of the exercise. Obviously, we hope that he is in the last 22 weeks of his mayoralty, but he has made the rather important point that we should not view transport, policing or any other area only through the prism of a particular Mayor. We have to look at the powers that should be in place for London governance and at the importance of ensuring that proper services are available for all Londoners.

Lee Scott: Does my hon. Friend agree that one of the most important things for the running of Crossrail, whether by TfL or any other body, is that it should not suffer from the same problems that affect London underground, where passengers, including my constituents—I am sure yours as well—have to travel in conditions in which it would not be legal to transport animals?

Ann Winterton: Not mine!

Mark Field: I am sure that there are plenty of people from Congleton who use the underground. My hon. Friend’s point was well made. My fears in relation to Crossrail are twofold. First, I fear that there will be a repeat of the “fares fair” problem that plagued us in the early 1980s, and many of our London constituents, if not necessarily businesses, would not regard themselves as benefiting directly from the Crossrail project. Secondly, if Crossrail is to work, and become a great success, it must have spurs well outside greater London. That is something else about which there is increasing concern. It is at the heart of the matters raised by my hon. Friend the Member for Wimbledon, and I hope the Minister can respond to those concerns. The biggest fear of many residents of Kent, Essex, Berkshire, Surrey and beyond is of the Mayor taking control of their railway services because he is unaccountable through any electoral process to people who live outside greater London. The focus is on the present incumbent of the mayoralty, but this is a sensible probing amendment and it will be interesting to discover where the Minister is coming from.
I disagreed with much of what the hon. Member for Richmond Park had to say, but in Mayor Livingstone’s defence, I think that his transport policy includes some sensible integration measures. My biggest worry, especially in relation to buses, is that it is the economics of the madhouse. We are losing hundreds of millions of pounds a year on that budget, ditto for congestion charging. I accept that Livingstone had the courage to go ahead with the congestion charge, but I suspect that whether or not he is re-elected it will be difficult to row back on what has been done. We have to accept the reality of the situation.
My biggest concern is about the sheer cost of the operation but, as the hon. Lady rightly pointed out, to integrate the overground elements with the system in east London in Hoxton and Haggerston is a positive step forwards. I suspect that she views the Silverlink line with rose-tinted glasses, given that she represents Richmond in west London where the service operates rather better than it does out in the east. I have been down to Silvertown and to North Woolwich, where the service is ramshackle and requires enormous investment to make it worthwhile. The population in that part of London is relatively small, although City airport could allow North Woolwich station to become a hub and, as we discussed in relation to Crossrail, a further station on the other side of the river in Woolwich itself would integrate the entire process. That is a sensible way forward but it would impose a great cost on London council tax payers now and, I fear, in many decades to come. I hope that the Minister will give serious thought to what we have said. As part and parcel of integration we need not just one template but the potential for openness to a broad range of different operators.

Tom Harris: I wondered how long it would take for party politics to raise its head in this long-running debate on Crossrail and I am disappointed that it has done so in the form of an ungracious attack on the London Mayor by the hon. Gentleman. I will not ask for your indulgence, Lady Winterton, as you would probably rule me out of order if I were to suggest that the hon. Member for Henley is far too busy to spend his time on a Public Bill Committee dealing with the largest infrastructure project that London has ever seen.

Ann Winterton: Order. I suggest that the Minister does not go down that track.

Tom Harris: That is a very wise ruling, Lady Winterton. I do not intend to do so.
The hon. Member for Wimbledon referred to the franchise system created by the Government. I was not a Member of the 1992 to 1997 Parliament, but from my recollection a Conservative Secretary of State invented the franchise system for the purposes of running down the rail system which, however, has been rescued, modified and made fit for purpose by this Government. It is simply not the case that we invented that system. Clause 35 disapplies the prohibition in the 1993 Act on a public sector operator acting as a franchisee, which helps to provide the necessary flexibility to accommodate a public sector operator of Crossrail passenger services. I do not want to give my hon. Friends any undue hope that the Government have any plans to renationalise the rail industry by the back door, as this is a purely practical measure.
It may be useful to use public sector franchisees during the phasing-in and stabilisation period. During the stabilisation period, service levels and performance will be fully tested and optimised. Until that has been done and, for example, the required performance level is set, it would be difficult to hold a conventional franchise competition. All franchises that are put out for competition operate on the basis that the network and services are already in place. We know passenger numbers and the pathways that are available, but that will not be the case at the outset of the provision of Crossrail services. Such a competition could result in franchise bids factoring in at least some element of project risk, and that may be better managed as part of the project delivery.
Several options are open at the moment, and one was mentioned in glowing terms by the hon. Member for Wimbledon. A decision has not been taken, as a significant amount of detail will need to be worked through in the coming years between the Mayor of London, the Department for Transport and train operators as to how exactly Crossrail will be integrated with national rail services, and will interact with London Underground. As I have said before, Crossrail is a unique railway in the UK, and it is essential to retain the flexibility to deliver every possible option if we are to operate services efficiently and effectively.

Question put and agreed to.

Clause 35 ordered to stand part of the Bill.

Clause 36

Disapplication of franchising and access exemptions

Stephen Hammond: I beg to move amendment No. 21, in clause 36, page 25, line 27, at end insert—
‘( ) Before the Secretary of State exercises the power under subsection (1), he shall consult such persons likely to be affected by the exercise of the power.’.
I am sure that the Committee’s usual good humour will return after the previous, slightly more controversial debate. The clause allows for the disapplication or modification of certain franchising and access exemptions. The exemptions in question are those that remove the ORR’s task of approving or directing access contracts and those that prevent Heathrow services from being franchised. What is missing from the clause is any hint of consultation—that has been a recurring theme of my comments throughout our sittings. The Committee will notice that the Government sometimes want to reassure us that consultation will take place even though there is no such provision in the Bill. I believe that to make the Bill work and to ensure that the exercise of the exceptional powers that are being granted to the Secretary of State is transparent, consultation procedures should be included in the Bill.
As we have said several times, Crossrail is a massive undertaking. Its implications are not just physical, as they affect a complex web of agreements that characterise the railway industry. To facilitate the multiple changes required to expedite such a project, the Bill should adjust existing legislation, but the clause fails to ensure that those who will be affected by the changes are given the voice that they should be allowed prior to those changes coming into effect. My amendment gives the clause the necessary transparency and gives those who have not been given a voice the voice they should be allowed.

Tom Harris: Clause 36 is needed because the railway clauses in the Bill work by making use of the regulatory system for the national rail network. However, the London underground and Heathrow spur networks, which are affected by the Crossrail proposals, are exempt from that regulatory system. The clause therefore enables parts of those exemptions to be amended or revoked where necessary to facilitate Crossrail services.
The Railways (London Regional Transport) (Exemptions) Order 1994, which is relevant to the Transport for London infrastructure, provided an exemption from the outset of rail privatisation, and hence modern rail regulation. Similarly, the Railways (Heathrow Express) (Exemptions) Order 1994 provided an exemption for the Heathrow spur. The clause enables parts of those orders to be amended or revoked, which would remove the exemption from rail regulation as regards capacity allocation and franchising, for purpose of facilitating Crossrail services.
Clearly both BAA, as the owner of the Heathrow network, and Transport for London, in its role in relation to the London underground, are important players in the Crossrail project. There is no need for the hon. Gentleman’s amendment, as those parties are already involved specifically and individually in determining how best to manage complex interactions between Crossrail, the Heathrow spur and London Underground networks. Given that changes to exemptions would require a statutory instrument subject to annulment in the House, it is inconceivable that the affected parties would not be consulted before such a measure was made. I therefore hope that the hon. Gentleman will withdraw his amendment.

Stephen Hammond: I have listened carefully to the Minister’s answer. He said initially that BAA and TfL, via the network of arrangements, were to be consulted. Will he clarify exactly what they are or whether they are the contracts that are already in place?

Tom Harris: Consultation will inevitably take place in the circumstances referred to in the Bill. Essentially, the purpose of the hon. Gentleman’s amendment, as he has already said, is to require the Secretary of State to consult. However, I believe that it is unnecessary.
Both parties are already closely involved in the project plan for Crossrail and are very aware of any effect on their own individual networks. BAA has petitioned against the Bill at Select Committee stage, and we are in discussions on the issues that it has raised. There are a number of interfaces in which the Crossrail team, the Cross London Rail Links Ltd, BAA and London Underground are already having the discussions that he wants to mandate in the amendment.

Stephen Hammond: I thank the Minister for answering the question that I wished to have clarified. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 36 ordered to stand part of the Bill.

Clause 37

Closures

Stephen Hammond: I beg to move amendment No. 22, in clause 37, page 26, line 6, at end add—
‘( ) Before the Secretary of State exercises the power under subsection (1), he shall consult the Office of Rail Regulation and such other persons as he considers appropriate.’.
Here we go again on consultation. The clause deals with closures and, in essence, commits the Secretary of State to close railway lines where he sees necessary. At least, that is my understanding of it. It gives the Secretary of State such a power by means of allowing him to direct that certain provisions of the Railways Act 2005 will not be applicable. Again, I am sure that this is an absolutely necessary step, but it must be done in the right way.
The discontinuance of a railway service, however temporary, can cause a great deal of disruption for an operator and for passengers, and I am sure that the Minister will say that adequate consultation will be carried out, but we need to be clear that it will be, so that the affected parties can also adapt as they see fit. The consultation should include, but not be restricted to, the Office of the Rail Regulator.
I am trying to ensure that the Secretary of State has the freedom to decide who else it might be appropriate to consult, but I certainly want to ensure that the powers of consultation are clear and defined in the Bill, and that passenger groups, the appropriate train operator and those who might be affected are also consulted. The amendment is perhaps slightly different in tone to the last one, but it provides for the sensible and responsible thing to do. I hope that the Minister will agree.

Tom Harris: I rise to disappoint the hon. Gentleman. The purpose of clause 37 is to ensure that the closure provisions of the 2005 Act do not apply when such a closure is required in connection with the construction or maintenance of the Crossrail works, or as a consequence of Crossrail passenger services. That disapplication does not apply to Crossrail services or facilities themselves. To deliver the Crossrail project, it will be essential to alter track and stations and to reorganise suburban services and much of that has the potential to be classed as closures. Even quite small changes can be classed as closures
If the Secretary of State decides whether to apply closure procedures—it is a function that she cannot delegate—the clause provides that she would consider the closure proposals by, or on behalf of, the nominated undertaker, and challenge them as necessary in reaching her decisions.
There is nothing to prevent the Secretary of State from consulting when she thinks that it would be appropriate, especially given that she would consider the proposals in the context of her duties to the national rail network, not just the Crossrail project in isolation. She might, for example, look at the extent to which the interests of others had been taken into account in the process, where possible. She might also decide that a closure merits being subject to the closure procedures in the 2005 Act with the consultation process that that entails. However, I think that she needs some flexibility to do what is appropriate in each case rather than to have a blanket requirement to consult.
This issue gets to the nub of our opposition to the amendment. What concerns me about the blanket requirement is that it risks creating false expectations of what the Secretary of State would be able to do in the light of consultations. For example, if a consultation on a small scheme resulted in arguments opposed to the closure, it would still have to go ahead to enable Crossrail passenger services to proceed. A few closures, such as of services and parts of stations are central to, and part of, the project proposals before Parliament. As I have said, the Secretary of State would be duty bound to consider those in the wider context of the UK railways.
Finally, the finer details of closure requirements are likely to emerge in the detail design process. Network Rail is likely to undertake most of the network works and will play a major part in the detail design process. It will be in Network Rail’s interest to ensure that the wider interests of the network and its other users are taken fully into account from the outset. I hope, perhaps in vain, that following this explanation, the hon. Gentleman will see fit to withdraw the amendment.

Stephen Hammond: Again, I listened carefully to the Minister, and again, I could not understand a lot of what he said. Even after consultation, it may be necessary to close certain things, even if the people who are consulted disagree with that. That is in the nature of consultation. I do not see how the amendment, other than in the very clearest way, is a major imposition on the Secretary of State. It does not say that they must consult with any or every person as would wish to be consulted with. It refers to
“and such other persons as he considers appropriate.”
The Minister has said that it is inconceivable that the Secretary of State would not consult such people. Why, therefore, does he not wish to see that in the Bill? I find this extraordinary. We have accepted all the way through that this is an exceptional project requiring exceptional powers and exceptional discretion, but when we can put in the Bill a definition of those powers, it would seem appropriate to do so. I am not sure that the he has reassured me on why he wants the amendment to fall.

Tom Harris: As I said in my original remarks, I am happy to expand on them. Under the 2005 Act, a closure has a wide definition. If part of a platform on a station had to be closed, I would see no benefit in triggering a consultation process on such a very small closure. The effect of the amendment would be that such a process would have to commence on every single closure as defined by the 2005 Act.
I accept that in most peoples’ minds, a closure means that of a railway station or a line. I accept that that is a concern. With regard to the wider responsibility for the rail network, it is frankly inconceivable that any Secretary of State would not consult on a major closure. However, the amendment would end up defining very many restrictions and very small closures as closures and would trigger a consultation system that would not be warranted in many cases.

Stephen Hammond: I listened to the Minister, but that is not entirely what the amendment says. It refers to
“and such other persons as he considers appropriate.”
If, under the 2005 Act, it was a minor closure, in those circumstances it would not be appropriate to consult with everybody. The amendment gives the Secretary of State exactly the flexibility that the Minister requires. I am tempted to withdraw the amendment, but at this stage I would like to test the will of the Committee, if for no other reason then to ensure that we are all awake.

Question put, That the amendment be made:—

The Committee divided: Ayes 5, Noes 8.

Question accordingly negatived.

Clause 37 ordered to stand part of the Bill.

Clauses 38 and 39 ordered to stand part of the Bill.

Clause 40

Duty to co-operate

Stephen Hammond: I beg to move amendment No. 23, in clause 40, page 27, line 2, at end insert
‘, but is an asset which enables the construction, maintenance and operation of Crossrail to occur.’.
In the same vein as many clauses in the Bill, clause 40 contains provisions to ensure that those charged with the building and operating of the Crossrail network are afforded all possible assistance by those who own and operate existing rail assets. Specifically, it gives the nominated undertaker the power to require facilities owners and operators to co-operate with them by force of an agreement. The explanatory notes state that Crossrail will, by necessity,
“interact with the existing railways”,
so it is certainly obvious that, as set out in the clause, there is a need for this provision. My intention in tabling the amendment is to ensure that there is absolutely no scope for doubt as to which of those assets we are talking about. I do not wish to return to the alcoholic allusions that we went through last Thursday—I think we have probably done that one to death. My concerns in this case, however, are similar. As the clause stands, it seems that the nominated undertaker can take action with regard to any railway asset anywhere. Although I am sure that the Minister is about to reassure us that the nominated undertaker will not use that power haphazardly or unsystematically, I cannot see any reason why we cannot specify on the face of the Bill that the assets that require the exceptional powers must be those that relate to Crossrail. Otherwise, there is scope for ambiguity. I believe that the amendment is rational and that the Bill would benefit from its inclusion.

Tom Harris: Crossrail will clearly interact a great deal with other railway assets both before and after it is built. For example, in the central area new Crossrail tunnels and stations will be constructed in and around existing underground stations and running tunnels and there will be more than £2 billion of Crossrail investment on the national rail network. Generally, the preferred option will be for whoever is appointed as the Crossrail nominated undertaker to address interface issues with owners of other railway assets on the basis of standard industry mechanisms. Clause 40 is, therefore, a provision that we should not need to rely on often.
However, the existing arrangements that govern both the national rail and London underground networks—that is where the interfaces will mostly come from—might not address all the issues that could arise in relation to a major new project such as Crossrail. It is therefore prudent to have the ability to resolve them.
It is important to point out that the clause works both ways: the controller of a non-Crossrail railway asset can also invoke the provision and require the nominated undertaker to agree how a matter is to be resolved. The object is to ensure that neither the nominated undertaker nor the other party can act unreasonably in dealing with a problem related to the interaction of the Crossrail works with overland or underground railway assets.
The amendment presents two problems. First, it would limit the nominated undertaker to using the power only where the non-Crossrail asset was one that enabled the construction, maintenance or operation of Crossrail to occur. In fact, problems could arise in relation to a wide range of railway assets, not just the subset.
The clause already requires the nominated undertaker to meet the test that the matter at issue must be one that affects the construction, maintenance or operation of Crossrail. We believe that that is the appropriate qualification, rather than the stricter test that the amendment would set.
The second problem is that the limitation that the amendment would impose would not apply in respect of subsection (2), so the provision would be unfairly weighted in favour of the non-Crossrail party. I do not imagine that that is the intention, but it would be the effect.
My key point is that the creation of Crossrail, for which I detect considerable support in the Committee, should not be impeded because an interface issue with another railway network cannot be resolved. Nor should Crossrail cause unnecessary problems for other railway networks without there being a means of resolution. The clause is an essential back-up provision that recognises the fact that integrating a new railway on the scale of Crossrail is difficult but should never be impossible.
I hope that that is explanation enough to persuade the hon. Member for Wimbledon to withdraw his amendment.

Stephen Hammond: It is indeed a very full explanation. Certainly, I would not want the unintended consequence of subsection (2) not falling within the limitation, and that is a considerable demerit in my drafting of the amendment. The Minister mentioned the circumstances regarding the asset where those powers would be required. Can he give us an example of where it would not be an asset that enabled the construction, maintenance and operation of Crossrail?

Tom Harris: One example that springs to mind would be where a Crossrail tunnel was being built very close to, or perhaps underneath, an existing London underground line. Although that particular line would not be defined in the terms of the hon. Gentleman’s amendment, it would nevertheless be necessary to come to some agreement with London Underground to allow the unimpeded progress of the construction to take place.

Stephen Hammond: That was an interesting explanation. I would have thought that that was exactly the asset that would enable the construction of Crossrail. None the less, I take it that the Minister is trying to be helpful and I accept that my amendment would have an unintended consequence as it relates to subsection (2), which is my drafting error. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 40 ordered to stand part of the Bill.

Clause 41

Arbitration after referral under section 40(3)

Stephen Hammond: I beg to move amendment No. 24, in clause 41, page 27, line 33, leave out ‘results’ and insert ‘objectives’.
I accept that the amendment might be described as an exercise in terminology and semantics. Arbitration has come up a number of times in our discussions and we now come to two clauses that set out how it will work in practice, as it relates to the duty to co-operate. When I first read clause 41(1), I was slightly taken aback. Arbitration is, by definition, a process by which a third party settles a dispute between two persons or organisations. The implication of the subsection, however, is that the Secretary of State can directly arbiter as to the outcome of an arbitration in which one party is the nominated undertaker.
As we know, the nominated undertaker could be an appointee of the Secretary of State and could even be the Secretary of State herself. I would like to give the Minister the benefit of the doubt and assume that that was not the intention in drafting the subsection. After all, we do not want the defendant to be able to tell the jury and the judge exactly what to do.
In my exercise in terminology, I suggest a wording that would remove the doubt. Replacing “results” with “objectives” would make it clear that the Secretary of State could have a say in what form the outcome of the arbitration should take, but not in what the decision was. I ask the Minister to consider those points. Perhaps he will look favourably on the amendment.

Tom Harris: Perhaps we should rename the amendment the “number of angels dancing on the head of a pin amendment”. To set these matters in context, the clause sets out the mechanism for disputes under clause 40(3) to be settled by arbitration. The general provisions on arbitration are continued in clause 62. Subsection (3), which the amendment would affect, allows the Secretary of State to direct the arbitrator as to the overall results to be achieved by the settlement. That is to avoid the possibility that the outcome or result of the arbitration might prevent something that is critical to the Crossrail project.
I bear in mind the criticisms that the hon. Gentleman has made on this and previous clauses. Even if he has reservations, I hope he understands that the results of an arbitration cannot allow the construction of Crossrail to be impeded in any way. That is the only caveat that the Secretary of State will have in mind when making those directions. The arbitrator will have full control over the terms, including as to compensation of the arbitration award, subject to the rule that it must achieve certain practical results.
The direction of the Secretary of State will generally be only to facilitate the completion of the Crossrail works within the agreed time scale or cost, or to do with the subsequent maintenance of the all-important services that Crossrail will deliver. Even then, the Secretary of State will ensure that Crossrail is not delivered to the unreasonable detriment of the rest of the rail network.
The amendment’s use of objectives in subsection (3) is the angels-dancing-on-the-head-of-a-pin section. In terms of legal semantics, it would ultimately miscast what is happening. In making a direction, the Secretary of State has an objective concerning the construction, maintenance or operation of Crossrail. In acting further to the direction, the arbitrator will retain his original objective—the fair resolution of a dispute—within any parameters established by the direction.
To offer some further reassurance to the hon. Gentleman, as with clause 40, this is likely to be a fall-back power in practice. First, there is the general reassurance for the rail industry of the Department’s intention to work within normal industry processes as far as possible in connection with the Crossrail project. Secondly, it is envisaged that many of the works will be undertaken by railway operators that have a direct interest in integrating Crossrail works successfully with their own existing assets. Finally, some agreements are already in place regarding those matters. I hope that the hon. Gentleman will consider withdrawing the amendment.

Stephen Hammond: I hear the Minister’s reassurance that he expects this to be primarily a fall-back power. That does not necessarily mean that we should allow fall-back powers to have a lower test than we apply to other things. None the less, I hear that he thinks that we are dancing on a pin head.

Tom Harris: Not you personally.

Stephen Hammond: If only I could. I fully understand the objectives. However, the word “results” has an implication of trying to affect the arbitration and prejudge it. I have listened to the Minister and am happy with his reassurance. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 41 ordered to stand part of the Bill.

Clause 42 ordered to stand part of the Bill.

Clause 43

Transfer of functions relating to works

Stephen Hammond: I beg to move amendment No. 25, in clause 43, page 29, line 1, leave out subsection (2).
This is very much a probing amendment. Clause 43 is necessary and, as I am sure the Minister will point out, it repeats almost word for word what is in the Channel Tunnel Rail Link Act 1996. However, just because there is a precedent does not mean that we should not examine the powers or redefine them.
The clause refers to the transfer of statutory powers and duties relating to works on land acquired by the Secretary of State for the purposes of Crossrail. It makes perfect sense that if the Secretary of State acquires such land he should also acquire any related statutory powers. I want to probe the Minister about exactly what subsection (2) adds to that process. It provides for
“the further transfer...of a power or duty transferred under subsection (1) or this subsection.”
Can he explain exactly what that is intended to mean in practice and what are the further transfers that he anticipates he needs the power to cover? In the spirit of this probing amendment, I hope that he can clarify that matter for me.

Tom Harris: Again, to set the amendment in context, when the Secretary of State acquires from a railway operator land on which there are works that have been authorised by a previous statute, clause 43 allows for the transfer to the Secretary of State or the nominated undertaker any statutory powers or duties relating to those works and previously exercisable by the railway operator. The clause, oddly enough, is precedented in the 1996 Act—a fact of which I would not be so dismissive as the hon. Gentleman is tempted to be.

Mark Field: There is great danger that we get bad drafting if we allow too much legislation simply to consider precedent. I say that as someone who practised briefly as a solicitor in the early 1990s. Whenever a novel problem arose there was a temptation to ask, “Where’s the precedent?” We are joking about this to a certain extent, and I accept that there are similarities between the two pieces of legislation that make it logical at least to keep an eye on how the clauses are drafted.
There is an issue to consider about parliamentary drafting if the draftsman’s first instinct is, “Let’s look at the precedent and see how we can mess around with it,” when thelegislation is 11 years old. That is not a terribly sensible approach. Our approach should be to ask what we are trying to achieve to ensure that this is robust legislation for decades to come. We should not simply justify it by looking at precedent. It might be easy to draft and slightly easier for the Minister to justify certain clauses, but we need to look much more sensibly at what the Bill is trying to achieve.

Tom Harris: I agree with the hon. Gentleman. It would not be appropriate or justifiable simply to say that because the clause has a precedent that alone justifies its existence in subsequent legislation, which is why I want to explain why we wish to follow that precedent.
The 1996 Act is the closest legislative comparison we have to the Crossrail project. It was a hybrid Bill that introduced a multi-billion pound infrastructure project that was, at the time, the largest civil engineering project in Europe, as Crossrail will be when it is under construction. It is therefore justifiable to consider the precedent of the 1996 Act. It was robust legislation that, crucially, worked, which is what we want the Bill to do. However, I accept the hon. Gentleman’s point that precedent alone is not justification.
Subsection (2) allows the Secretary of State further to transfer to herself or a nominated undertaker any of the powers or duties previously transferred from a railway operator. If subsection (2) were deleted, as proposed by the amendment, those powers or duties, after being transferred, could not be transferred again. That would adversely affect cases in which the same land was needed for works by different nominated undertakers, which is entirely possible—I would say likely—especially in relation to construction sites.
The result would be that when the first nominated undertaker handed back land so that the second nominated undertaker could undertake his work, the Secretary of State would not be able to ensure that the powers and duties of the original railway operator transferred with the land. That would be an unsatisfactory outcome, to say the least. It would not be in the interests of the continued proper management of the railway. I hope that that is explanation enough for the hon. Member for Wimbledon.

Stephen Hammond: Indeed, it is. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 43 ordered to stand part of the Bill.

Clauses 44 and 45 ordered to stand part of the Bill.

Schedule 11 agreed to.

Clause 46

Transfer schemes

Question proposed, That the clause stand part of the Bill.

Ann Winterton: With this it will be convenient to discuss the following: Government new clause 1—Transfer schemes: tax provisions.
Government new schedule 1—Transfer schemes: tax provisions.

Tom Harris: Clause 46 brings into effect schedule 12, which in turn sets out the power of the Secretary of State to make schemes to transfer property, rights and liabilities. At this point would it be appropriate to move straight on to Government new clause 1, Lady Winterton?

Ann Winterton: Yes, all three measures are being considered together.

Tom Harris: The new clause will give effect to a new schedule relating to the tax treatment concerning statutory transfer schemes. New schedule 1 makes provision relating to tax consequences that could otherwise arise in relation to the transfers of property, rights and liabilities under transfer schemes made under schedule 12. Broadly, it ensures that inappropriate tax charges and reliefs are not triggered as a result of a transfer scheme and provides continuity of tax treatment where appropriate.
At a level of principle therefore, an understanding of schedule 12 is—it says in my briefing—quite straightforward. It is intended to cater for the various scenarios concerning the transfer of assets and liabilities in the context of construction and delivery of Crossrail. It is right to draw Members’ attention to the fact that because Crossrail will not be completed for a number of years, we are looking to take a power by statutory instrument to make further modifications to the tax treatment of transfer schemes.
We consider that that is necessary in order to deal with the inevitable but unforeseeable future adaptation of the tax system. Expressed at a level of principle, the schedule is straightforward, but the detail is somewhat technical and I do not propose to go into it in great depth. I hope that what I have said today and the explanation in my letter of 19 November 2007, which is available in the Committee Room, will persuade hon. Members to give these measures their support.

Stephen Hammond: I am grateful to the Minister for that opening to this short debate. While schedule 12 may well be quite straightforward in principle, those of us who are not of the profession that he so likes found some of the detail quite impenetrable at times.

Ann Winterton: Order. The hon. Gentleman referred to schedule 12. We are dealing with new schedule 1.

Stephen Hammond: I stand corrected and I thank you for that.

Jeremy Wright: Even the title is impenetrable.

Stephen Hammond: My hon. Friend is quite right. The detail is difficult and technical and it is has been difficult for some of us to explore it properly. We are grateful to the Minister for his letter of 19 November. There is just one thing on which I would like him to give us a little more detail. He used the phrases “inappropriate tax charges and reliefs” and “inappropriate tax consequences” several times, but could he clarify what he means by inappropriate and give us one or two examples of what is inappropriate? If inspiration does not arrive in the normal way, I will be happy for him to concede that he might need to write to me to define that term.

Tom Harris: I would be more than happy to dazzle the hon. Gentleman with the details that he asked for, but I will save the Committee some time and simply write to him with them and with some of the examples that he asked for. I hope that that will satisfy him.

Question put and agreed to.

Clause 46 ordered to stand part of the Bill.

Schedule 12

Transfer schemes

Stephen Hammond: I beg to move amendment No. 53, in schedule 12, page 196, line 40, leave out ‘any person, including the Secretary of State’ and insert
‘either the Secretary of State or the nominated undertaker’.

Ann Winterton: With this it will be convenient to discuss the following amendments: No. 54, in schedule 12, page 197, line 13, leave out ‘any person, including the Secretary of State’ and insert
‘either the Secretary of State or the nominated undertaker’.
No. 55, in schedule 12, page 197, line 22, leave out ‘any person’ and insert ‘the nominated undertaker’.

Stephen Hammond: The three amendments are identical in purpose. They relate to schedule 12, which relates, as the Minister has just said, to the transfer of property rights and liabilities from one party to another. Their purpose is to ensure that the transfer is made to an appropriate party.
It is not necessary for the Secretary of State to make a transfer scheme for anyone other than herself or the nominated undertaker. Throughout the Bill, we have given those two people various rights and powers, but the schedule appears unduly to extend that principle. I therefore look forward to the Minister explaining the circumstances in which he envisages property rights or liabilities will need to be transferred to someone other than the Secretary of State or the nominated undertaker for the purposes of the schedule.

Tom Harris: Schedule 12 sets out the Secretary of State’s powers to make schemes for the transfer of property rights and liabilities—known as transfer schemes—from himself or certain other bodies to any person, including the Secretary of State. If approved, the amendments would remove the Secretary of State’s right to make a scheme for the transfer of property rights and liabilities from himself to any person, including the Secretary of State, and instead limit his powers of transfer to
“either the Secretary of State or the nominated undertaker”.
If approved, the amendments would remove the Secretary of State’s right to make a scheme for the purposes connected with Crossrail for the transfer of property rights and liabilities from the Greater London authority, TfL, the London Development Agency and their subsidiaries to any person, including the Secretary of State, and instead constrain the Secretary of State’s powers of transfer to
“either the Secretary of State or the nominated undertaker”.
Finally, amendment No. 55 would, if approved, remove the Secretary of State’s right to make a scheme for the purposes connected with Crossrail for the transfer of property rights and liabilities from the Secretary of State or a company wholly owned by him to any person, and instead limit the Secretary of State’s powers of transfer to the nominated undertaker.
Taking the amendments collectively, the hon. Gentleman’s overall intention appears to be to restrict the Secretary of State’s powers to transfer property rights and liabilities from himself to any person, which would not make much sense at this stage of the project. The project is at a stage where the final ownership structure has not yet been decided, so it is too early to say with absolute certainty who all the players might be. It must therefore make sense to allow flexibility in the making of transfer schemes to cater for all eventualities, so I hope that the hon. Gentleman will consider withdrawing the amendment.

Stephen Hammond: I understand the Minister’s clear explanation, but I was seeking some examples of where these powers will be necessary. I fully understand his desire not to limit flexibility, but we none the less need an example of where the Secretary of State might feel that these powers are necessary.

Tom Harris: Network Rail, for example, might be subject to a transfer of property to it from the Secretary of State in respect of assets at a tunnel interface.

Stephen Hammond: I am grateful for that. After that example and the Minister’s full explanation I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 12 agreed to.

Clause 47

Holder of functions of nominated undertaker

Stephen Hammond: I beg to move amendment No. 56, in clause 47, page 30, line 10, at end add
‘, relevant London borough council leaders and chief executives, and those officials with the same standing in relevant borough councils and unitary authorities outside of London.’.
Clause 47 is important. It relates to the appointment of the nominated undertaker, the body that is to assume the task of building Crossrail. Subsection (4) requires the Secretary of State to consult the Mayor of London. Does the Minister think that it would be prudent to consult not only the Mayor of London, whoever that might be, but leaders of local authorities? The Secretary of State should look beyond consultation just with the Mayor of London, and should be required to consult representatives of local government when making the decision. After all, Crossrail is certain to have ramifications in several London boroughs in areas both east and west of the City.
Local councils will have to deal with several issues arising as a direct result of Crossrail, and I sense that they may be better minded to co-operate if they feel that they have been included in decision-making processes relating to the project from the outset. I have no doubt that some of the boroughs in question have already made representations to the Select Committees, and I am sure that those representations were taken very seriously. None the less, the amendment is non-controversial. Local government has a role to play in the success of the project. It would be a mistake to exclude it from the Bill.
My amendment is designed to ensure that the appropriate local government representatives—the amendment specifies them as the borough council leaders and chief executives, and officials of the same standing in borough councils outside Greater London—would be consulted on the appointment of the nominated undertaker, who will, after all, become such a presence in their area. I hope that the Minister will feel minded to accept the amendment.

Tom Harris: Clause 47 empowers the Secretary of State to specify by order one or more nominated undertakers, for the purposes of the Bill. The clause requires the Secretary of State, before making such a nomination order, to consult the Mayor of London—who will, I am sure, be Ken Livingstone. It also allows the Secretary of State, by agreement with the Mayor of London and whoever it is proposed to name in the nomination order, to fetter his discretion as to the exercise of the power granted in subsection (1). That power is necessary to enable the Secretary of State to make contractual arrangements prior to the nomination of a person or body as the nominated undertaker.
The amendment would require the Secretary of State to consult leaders and chief executives of local authorities along the route before making a nomination order and before entering into agreements with the proposed nominated undertaker. The crucial part of my opposition to the amendment is that clause 47 requires the Secretary of State to consult the Mayor before taking either of the actions specified. As the hon. Member for Wimbledon knows, the Mayor is co-sponsor of Crossrail; that is why he is given the relevant power. It is intended that the Mayor will be responsible for delivering the project through Cross London Rail Links Ltd. I expect to say more about how it is intended to manage the project when the relevant amendments are considered.
For the purpose of the current debate the simple point is that it is right that the Mayor, as co-sponsor of Crossrail, should be consulted when the Secretary of State contemplates making a nomination order or entering into an agreement with any nominated undertaker. The chief executives to whom the amendment refers are not co-sponsors of Crossrail, and it would not be appropriate for there to be an obligation to consult local authorities along the route about the matters before us. There will be a good deal of discussion and consultation with key stakeholders, such as local authorities, because they will have a key role to play in the detailed delivery of the project, but it does not seem appropriate at this stage to consult them about the identity of a nominated undertaker or the terms under which a nominated undertaker will be commissioned to carry out the work. Such matters are properly for the project’s sponsors, so I trust that the hon. Gentleman will withdraw the amendment.

Stephen Hammond: I have listened to the Minister’s explanation, although I certainly do not share his certainty about who will be Mayor of London at any given time—indeed, he and I are completely at variance on that point.
I recognise the fact that the Mayor is the co-sponsor, but local government needs to be a key stakeholder, and the Minister has said that it will be involved in the consultation process. I therefore fail to understand the Government’s reluctance to refer in the Bill to the fact that they will consult key stakeholders. Although I am happy to take the Minister’s reassurance on that, we do not know whether we will have a different Minister, a different Mayor and a different view at some stage, so it is odd that the Government will not include any reassurance in the Bill.
It is disappointing that the Minister will not accept a number of our points about consultation, but given that the amendment deals with the co-sponsors and the nominated undertaker, I am prepared to ask the Committee’s leave to withdraw it. However, I will table several other amendments about consultation to test the will of the Committee. However, with your permission, Lady Winterton, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Susan Kramer: I beg to move amendment No. 2, in clause 47, page 30, line 20, at end insert—
‘( ) An order made under subsection (1) shall set out all information that the Secretary of State considers necessary relating to—
(a) the sources of funding for the relevant provisions of this Act, and
(b) the uses to which it is proposed that funding should be put.’.

Ann Winterton: With this it will be convenient to discuss amendment No. 3, in clause 47, page 30, line 22, at end insert—
‘( ) An order under subsection (1) shall not be made unless a draft has been laid before and approved by a resolution of each House of Parliament.’.

Susan Kramer: Amendments Nos. 2 and 3 obviously go together and are designed to ensure that Parliament would not have to sign a blank cheque. The issue has been tackled to an extent, given the Government’s willingness yesterday to put the heads of terms in the House of Commons Library in both summary and slightly more expanded form. There is some editing, which is always frustrating, to protect commercial confidentiality, but we are assured that it has been kept to a minimum.
There is also a letter from the Mayor outlining how he intends to proceed with the element of finance that is the responsibility of London. That is a significant improvement on the situation that we faced when the Bill was first presented and we first tabled our amendments. However, I am still left with a number of questions for the Minister.
First, as the Minister will be aware from looking at the heads of terms, they in no way represent a legally binding obligation, and no such obligations will be entered into until after the legislation receives Royal Assent. Will he therefore let us know how he intends to keep the House informed of the final bill, so that we are not constantly having to sign a blank cheque? Will he also let us know whether there is any mechanism he would accept that allowed the House to express its verdict once the final structure for financing Crossrail and its related obligations was agreed?
As the Minister will be aware, it is often in the final months of negotiation that a deal, and particularly its financing, loses any relationship to the structure that was previously discussed. As the various financial institutions become involved, suddenly the fundamental nature of risk allocation and of who is to pay what and where essentially changes. Therefore, what mechanism does he think would allow the House some appropriate understanding, which would not be possible prior to Royal Assent, according to the timetable before us?
Secondly, will the Minister help us on some understanding of a key element that seems barely to be discussed within the heads of terms? The heads of terms lay out various sources of financing, coming up to the total of £15.9 billion. The uses of funds is a one-line item only, and I understand why the Minister has presented only a one-line item for that. He presumably wishes to protect from general public knowledge the size of the contingency that is built into the uses of funds. That is sometimes a rational thing to do, because the various bidders on the contract, if they were to know the size of the contingency, would be likely to raise their prices to absorb it. He will be aware that the rumour mill, which is very active within this particular industry, has suggested that that contingency is an exceedingly large figure.
We always talk about projects coming in on budget and suggest that that is a good thing, but when there is a large contingency, one would expect a project to come in under budget. Having looked at the heads of terms, I am not clear who is the beneficiary of any such savings and underspend. There is only a one-line reference in those documents.
I looked at the heads of terms that are presented as part of the sources and uses statement that I requested in relation to the amendment. With regard to the timing within which funds are applied from the various sources, it shows that the funds for the two last years, 2016 and 2017, are underwritten by TfL and the Greater London authority, which makes one suppose—correctly, I hope—that at least the first element of the contingency will be clawed back to TfL and the GLA, although I do not think that that is made clear anywhere in the document.
If the contingency were to be, for example, almost the same size as the Department’s contribution, it would be important to know whether the Department anticipated reclaiming all its contribution, leaving the project to be funded solely by Londoners, through either the fare box and TfL or the supplementary business rate. We need clarification on who is to be the beneficiary of those savings and who, in a sense, is carrying that element of the risk.
I make a strong plea that London fare payers should be the first to benefit from any underspend and the London business community should be the second, rather than the taxpayer being first out. That clarification and an expansion on the outline sources and uses that have been provided would be extremely helpful.
On overspend, which is obviously an ongoing worry and a reason for having an accurate sources and uses statement, I am somewhat confused by the details that have been laid out under the heads of terms. That might be in part because I have not had long to work my way through the document. However, there seem to be two intervention prices. Will the Minister at least provide us with clarity as to whether those fall under the total £15.9 billion? In other words, when a hard line is more appropriate and is non-contingency related, what uses number is developed? Do those cover the ground between that and the £15.9 billion, or are they in excess of it?
Indeed, within the document there is a description of a put option that is to be debt free. That is the ability of TfL ultimately to put the project back to the Department. Does that mean that, under these proposals, Londoners will be left carrying a substantial debt? They will lose control of the asset and any revenues generated by it if it is passed back to the Government. If that is a risk that Londoners are taking, it ought to be explicit.
The sources of fund statement indicates that section 106 money will be applied back into the project. Surely London’s many boroughs have the right to expect that section 106 money will be available to them to deal with the offsetting of the many problems that the construction of Crossrail will cause them. Will the Minister take us through the logic of allowing that money to be funded back into the project itself, rather than dealing with the mitigation of the impact on the affected communities?
The supplementary business rates are to be set, according to the Mayor’s letter, on any property that is in excess of £50,000 of rateable value. Will the Minister give his estimate of how many businesses will be affected? The media speculation that it will be between 100 and 150 businesses sounds rather peculiar, but considering something of that size certainly changes the character of the deal, compared to something that extends to many more companies across London.
There seems to be real confusion over what will happen with the retail industry. It is unclear how various retail branches will be treated—whether collectively or separately.
TfL is expected to produce some of its early contributions under a sources and uses statement from prudential borrowing. I am unclear whether that is expected to absorb all TfL’s prudential borrowing capacity. While TfL has used prudential borrowing on only a limited basis, it has been an essential part of a wide range of new projects that have been brought on stream. The East London line, Thameslink and a series of other projects will come into play in roughly the same period, so I am concerned to understand what the implications are if all the prudential borrowing is absorbed within the Crossrail project.
Lastly, within the heads of terms, despite the fact that they have been mentioned over and over again, there is not one single word dealing with the issue of freight and freight access. It seems extraordinary that those matters are not even included in the contractual regime proposed by these various documents. Is the Minister willing to address that issue?

Mark Field: I should first salute the hon. Lady for her great optimism that somehow this project will not have a great cost overrun. All experience suggests that a budget of £16 billion is likely to be exceeded, not least because we were discussing only £10 billion to £13 billion three or four years ago when debate on Crossrail became more common in the House.
I fundamentally disagree with the hon. Lady’s view that it should be the fare box that gets first advantage of any underspend. The London council tax payer should get first advantage. Some people who are likely to use Crossrail will come from outside London and from abroad, but a significant number of Londoners will also do so. A large number of infrastructure projects are in part being funded by London council tax. In my own city of Westminster, this year, for the first time, more than half the council tax that any resident pays is now down to the mayoral precept. One can only imagine that, having underwritten the Olympic games and elements of this project, that statistic will become worse still.
A Mayor who does not empty a single refuse bin, sweep a single street or run a single school or social services department will none the less take an enormous proportion of the council tax spend from Westminster residents. I appreciate that the same will increasingly apply to other parts of London.
There is a difficulty with what the hon. Lady said about section 106 agreements. I agree with her that much of the money should be used to mitigate the localised loss of amenity because of disruption, but the reality is that the parcel was lost during previous debates on Crossrail and on the Greater London Authority Bill. It is clear that the Mayor is keen to have a central pot of section 106 moneys to utilise for purposes other than local mitigation, so I have some concerns along the line that the hon. Lady put forward. I would be interested to hear what the Minister has to say, but I make a strong plea for the London council tax payer. If the project comes in within budget and money is to be given back, he or she should be first and foremost, rather than giving it back through the fare box.
Indeed, the business community is also involved in a fairly unprecedented way—Canary Wharf with £400 million, and the City of London with £250 million and rising because of other connections—but I suspect that that will become much more common for large-scale infrastructure projects in the decades ahead. The business community will be rather concerned, and it may become much more difficult to include it in future projects, if there is to be a massive underspend when there has been a reliance on its money.
I suspect that this is probably wishful thinking, given the likely situation in respect of expenditure on this project, but I hope that I am wrong on that. It is important that the London council tax payer, who is much beleaguered by contributions to a range of national projects, should be the first beneficiary of any underspend.

Brian Binley: I am beginning to get the impression that there is a general view that the project is purely about London, but of course it is not. It impacts sizeably on the rest of our community in many ways, but I fear that that is not taken into account in the amendment. The people of Northampton and Northamptonshire generally are concerned about Crossrail because it does not help their transport problems one iota, yet it will cost them, through the Exchequer, a considerable amount of money. The whole question of transparency in respect of Crossrail is vital not only to London but to the rest of the country, which will be affected by it but which will not get quite the benefits that many Londoners hope it will bring.
Let us talk about transparency, particularly in respect of money. It seems that the scheme has gone from £6 billion to £16 billion in two short years. The costs need to be totally transparent but have not been in the past. We do not understand why that massive leap has taken place. I have seen some of the ways that Crossrail has been costed, and, frankly, as a business man, I have been horrified. The question of Woolwich station itself was enough to frighten the taxpayer to death. It went from £350 million down to about £120 million. I know that that is not for the whole station, but the methods applied to costing were most disturbing.
Let us talk about another aspect that will affect the rest of the country: why we need transparency and why I do not think that the amendment covers that need. I am concerned, as are many of my constituents, about the amount of money that London is taking for infrastructure projects. The Olympics will take a great deal of money, Crossrail is £16 billion and Heathrow will take a lot of money, too. Such projects draw resources from other parts of the country. They will certainly affect the ability to provide massive civil engineering infrastructure projects. I need to know how they will impact on other areas, particularly those that have sustainable community projects. They, too, have an immensely sizeable claim for infrastructure. Transparency is vital.
We talk about underspend. Quite frankly, I think that the rest of the country has a right to question the probability of overspend on Government projects. Indeed, it has been suggested to me that we could—I emphasise “could”—end up with a £25 billion or £30 billion project on our hands. We have seen many Government projects increase threefold in cost, so the record is not very good, and we need reassurance. Transparency is the only way to achieve that, and it is needed not only in relation to existing figures—we need ongoing reports too. The amendment does not address that need.
I am immensely concerned about the impact on the rest of the country, so I want the Minister to tell us how we can be fair and transparent for the nation in terms of costing, focus and the drawing of resources by Crossrail from other projects that are worthy, that are needed elsewhere in the country, and that might be affected by Crossrail or other projects in and around London. How will the Minister reassure us in that respect?

Tom Harris: I appreciate the opportunity to take part in a wide-ranging debate on financing, and I congratulate the hon. Member for Richmond Park, who in the carry-over debate was clearly disappointed when I mentioned that Crossrail finance would not be included in the Bill. She has contrived a fairly ingenious method of ensuring that the Committee has an opportunity to discuss financing arrangements.
I shall preface my remarks by pointing out that, given some of the problems that the hon. Lady has identified, there are certain areas of the financing agreement that will not be debated in detail in Committee. However, I can assure her that the Government are committed to complete transparency on funding arrangements. An example of that was the lodging of the heads of terms in the Library yesterday.
In the carry-over debate on 23 October, I made an offer to the hon. Member for Wimbledon, and to the hon. Lady’s hon. Friend, the hon. Member for Carshalton and Wallington, to give them an off-the-record Chatham House rule briefing. They took up that offer, which has been helpful to the Committee’s deliberations. If I cannot give detailed answers to certain of her questions, I hope that she will nevertheless accept that the Government are committed to transparency. I understand and accept the concerns that exist, particularly in the wider financial community.
The work that has been done on assessing the final true cost of Crossrail has resulted in a more robust position than in almost any other major civil engineering project of this type. I take issue with the suggestion by the hon. Member for Northampton, South that the estimated cost of Crossrail had risen from £6 billion to £16 billion in two years—I think the record will show that that is what he said. On the Bill’s Second Reading in 2005, the then Secretary of State for Transport, my right hon. Friend the Member for Edinburgh, South-West (Mr. Darling) pointed out that, at 2002 prices, the cost of Crossrail would be £10 billion, which equates almost exactly, I believe, with a cash amount of £15 billion to £16 billion in today’s terms by the end of the project.

Brian Binley: The Minister will understand that many figures have been bandied about in the past three or four years in relation to Crossrail, including in the Select Committee on which we worked. I do not doubt his word, but it is good at last to have some clearer idea of what will happen. Does he accept that there has been confusion in the past and that that is why transparency is needed in future?

Tom Harris: I do not accept that there has been confusion in Government or with Cross London Rail Links. I accept that confusion has many avenues and many sources, but I do not think that the Government are responsible for all of it. On Second Reading, the estimated cost was £10.2 billion. Out-turn cost by the end of Crossrail construction is estimated to be between £15 billion and £16 billion.
That leads me on to another point made by the hon. Member for Northampton, South. He started off, quite rightly, by pointing out that Crossrail is a project of national significance; it is not just a London project, but one that will have significant value for the rest of the United Kingdom, and I agreed with him. He then went on to complain about the cost of Crossrail having an impact on infrastructure projects in the rest of the country. Frankly, you cannot have it both ways. It is a national project that is being paid for, in part, by taxpayers throughout the United Kingdom, which is correct because it is a project of UK significance.

Brian Binley: I did not complain. I said that there was a fear that it could draw from other national projects and that that created a need for transparency. Does the Minister accept that that is the case?

Tom Harris: I accept that the hon. Gentleman is frightened, but I assure him that there is no need to be. The very fact of Crossrail’s construction and operation will, it is estimated, add £20 billion to the GDP of the whole country. So, as well as being an important infrastructure project for London—the benefits to London will be obvious—it will have a knock-on benefit for the rest of the United Kingdom economy.
The hon. Member for Cities of London and Westminster expressed some concern about the effect on council-tax payers in London and hoped that any underspend would directly benefit them. I am more than happy to stand corrected, but I understand that council tax is not intended as a source of funding for Crossrail; domestic council tax will not be top-sliced in order to pay for any part of the project. So, he can reassure his constituents, unless, of course, they own a business with a rateable value of over £50,000, which many of them will, I am sure. But council tax is not intended to be a source of funding.
The purpose of the first amendment tabled by the hon. Member for Richmond Park is to require the provision of information about how the project will be funded. Of course, as I have said, I am happy to support the case for transparency, but not through the means suggested. The Government’s approach to transparency was demonstrated yesterday when we published the heads of terms that have been agreed by the Secretary of State for Transport and Transport for London. Some details, as the hon. Lady has already said, have had to be redacted to protect commercial confidentiality, but the key terms of the deal between the co-sponsors of the project are now in the public domain.
We and Transport for London now need to progress the detailed arrangements that would support the heads of terms. That will include a large number of documents which we expect will take several months to finalise. Our presumption is that those documents will be made public, again, subject suitably to protecting commercial interests. On that basis, it would seem nugatory to require in the Bill for a nomination order to contain information that will be set out elsewhere and in more detail. Although, as I have said, I pay tribute to the ingenuity that the hon. Lady has exercised in securing a debate on finance in the Committee.
A nomination order is not, in any case, an appropriate place to provide the sort of detailed contractual information that the hon. Lady wishes to see. Furthermore, a practical point is that there may be more than one nomination order and, if that were the case, the supporting financial information relating to any one nomination order would tell us only part of the whole story. That would confuse and, even, frighten, rather than enlighten.
The other feature of the hon. Lady’s amendment is that any nomination order, by implication, the additional financial information that she is arguing should be included, should be subject to a positive decision of Parliament. The degree of parliamentary scrutiny afforded to secondary legislation is, quite rightly, of great interest to hon. Members. I would simply point out that our predecessors saw fit to accept that nomination orders made under the Channel Tunnel Rail Link Act 1996 should be subject to the negative resolution procedure, and that is what we have provided for in the Bill. I believe that that is a reasonable approach.
Committee members understandably wish to know how the project is to be funded and managed. I would emphasise that we have started to provide that information already by publishing the heads of terms; we intend to make more information available in due course. Indeed, the heads of terms explicitly state that information about the project should be provided in order to provide a higher level of transparency about the project. That is key to securing widespread support for the project.
The hon. Lady’s amendments are designed to produce the same answer but, as I have sought to explain, her suggested approach would not deliver the transparency that she wants. I therefore ask her, and ask her nicely, to withdraw her amendments.

Susan Kramer: The Minister is exactly right to say that my objective is to secure transparency. I believe that, because of the size and significance of the project, transparency is absolutely necessary if it is to have support and respect, both of which are critical. I take the Minister’s decision to release the heads of terms yesterday as a very important—I was going to use the word “gesture”, but it is probably a little stronger than that—evidence of willingness to provide information in a detailed and relevant way. I am grateful for that. The other assurance that he provided, which is that such information will be available on an ongoing basis—I hope that that will be with the clarity established in the first document—gives me a great deal of comfort. I am glad that we managed to find a mechanism to ensure that this discussion was part of the ongoing process of the Bill. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 47 ordered to stand part of the Bill.

Clause 48 ordered to stand part of the Bill.

Schedule 13

Disapplication and modification of miscellaneous controls

Stephen Hammond: I beg to move amendment No. 57, in schedule 13, page 206, line 25, leave out sub-paragraph (3).

Ann Winterton: With this it will be convenient to discuss amendment No. 58, in schedule 13, page 206, line 29, leave out ‘or (3)’.

Stephen Hammond: Schedule 13 is an important part of the Bill, in that it adjusts any legislation that might otherwise hinder the construction and operation of Crossrail. It includes a number of different paragraphs, a couple of which relate to London lorries and the effects of the London lorry ban order—the Greater London (Restriction of Goods Vehicles) Traffic Order 1985—on the Crossrail project.
Paragraph 10 of the schedule makes provision for the approval of a lorry licence if certain conditions are met. In principle, I can see that that is absolutely necessary, but the paragraph goes on to state that
“no condition may be imposed which is likely to obstruct the carrying out of authorised works”.
My concern about that wording is that there may be a number of circumstances in which localised conditions mean that the use of lorries will have to be slightly curtailed or at least regulated. I imagine that if a permit were granted, extra conditions would be imposed only if absolutely necessary, and if that were absolutely necessary, it would be unwise for the Bill to state that such a condition would automatically not be enforceable.
The underlying motivation for the amendment is a desire to see that the construction of Crossrail is carried out responsibly. I hope that the Minister will elucidate exactly how schedule 13 and, in particular, paragraph 10 in relation to approval of a lorry licence will operate, and reassure me that my amendment is not required.

Tom Harris: Again, the amendment is not necessary, but I can understand why the hon. Gentleman tabled it and the concerns that he has expressed. Paragraph 10 of schedule 13 deals with applications for the issue of a permit under the London lorry ban order in connection with the carrying out of Crossrail works authorised by the Bill, whether in an emergency, when special procedures set out in paragraph 11 apply, or in other circumstances. The London lorry ban order enables restrictions to be put in place on the use of heavy goods vehicles in the scheme area to help to minimise noise pollution in residential areas during unsocial hours.
Sub-paragraph (3) of paragraph 10 requires that if an application is granted
“no condition may be imposed which is likely to obstruct the carrying out of authorised works...in a timely and efficient manner, or...in accordance with approved arrangements.”
Sub-paragraph (4) allows an applicant aggrieved by a decision on the issue under sub-paragraph (2) or conditioning under sub-paragraph (3) of a permit to appeal to the Secretary of State.
The amendments proposed by the hon. Member for Wimbledon would allow the authority responsible for issuing permits to condition the permit in a way that could obstruct the timely and efficient carrying out of Crossrail works or be inconsistent with approvals previously given by the relevant local planning authorities to lorry routes.
The amendment is not desirable. It would allow the issuing authority to overrule the careful consideration that local planning authorities will already have given to the matter of lorry routing under the schedule 7 consents process. Schedule 7 expressly provides that the local planning authority may modify the nominated undertaker’s proposed arrangements for lorry routing on grounds including the preservation of the local environment, where that is reasonably possible. In other words, the amendment would undermine the good work that local authorities had already done on lorry routing.
In addition, the amendment would expose the project to additional cost and risk of delay. It is unreasonable for the project to face that risk, given the protections available to local residents through the schedule 7 process. There is the opportunity to petition in the Bill itself, and there have been a number of undertakings to petitioners on the matter of lorry routing. With those assurances about the other protections available to local residents as regards lorry routing, I invite the hon. Gentleman to withdraw the amendment.

Stephen Hammond: I listened carefully to the Minister and I am happy to accept his invitation. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Stephen Hammond: I beg to move amendment No. 59, in schedule 13, page 206, line 33, leave out from beginning to end of line 35 and insert—
‘( ) Where an appeal under sub-paragraph (4) is dismissed by the Secretary of State, it should be referred to arbitration’.
The amendment is self-explanatory. It would transfer the task of dispute resolution from the Secretary of State to a third-party arbiter. Clause 62 sets out a robust arbitration process, which would be suitable for resolving the kind of dispute that may arise as a result of the necessary disruption caused by the construction and operation of Crossrail. The resolution procedure provides, for example, that if two parties cannot agree on an arbiter, the president of the Institute of Mechanical Engineers or someone appointed by the ORR will perform the role of arbiter. If such an arbitration process is good enough to deal with disputes arising from provisions elsewhere in the Bill, why is it not good enough to deal with those arising from the provisions in this schedule?
The key benefit of arbitration is that the final decision is made by a person who is accepted by both parties to the dispute, which gives the arbiter the necessary authority and independence. I have no doubt that the Secretary of State would come to a reasoned and fair decision, but I fear, as I have said previously, that he or she may not have the same perceived independence as a third-party arbiter. Clause 62 provides for an independent arbiter, and such a person would be much better suited than the Secretary of State to making the relevant decisions. I therefore look forward to the Minister accepting my invitation to agree to the amendment.

Tom Harris: Paragraph 10 of schedule 13 to the Bill deals with applications for the issue of permits under the London lorry ban order in connection with the carrying out of Crossrail works. Sub-paragraph (4) provides that an applicant who is aggrieved by the decision of the local authority responsible for issuing the permit may appeal to the Secretary of State within 28 days of notification of the decision. Sub-paragraph (5) provides that the Secretary of State may allow or dismiss the appeal or vary the decision of the authority concerned.
The hon. Gentleman’s amendment would replace the certainty provided by the Secretary of State’s decision to dismiss an appeal by the applicant, who is likely to be a contractor or sub-contractor to the nominated undertaker, with an uncertain and unclear right or obligation—the drafting does not make clear which—to seek arbitration following the Secretary of State’s decision. Given that applications for permits cannot always be planned far in advance, as the inclusion of an emergency procedure in paragraph 11 anticipates, the option of further protracting the decision-making process through the further step of mandatory referral to arbitration would be of no benefit to the applicant or the progression of the Crossrail project more generally. I hope that the reference to the emergency situation will explain why the provisions for arbitration or the lack of arbitration in the schedule differ from those in the schedules to which the hon. Gentleman referred.

Stephen Hammond: I have listened to the Minister and clearly the emergency issue is one of relevance and importance. However, I am surprised that he thinks that the drafting is unclear. I thought that the words “should be referred to” would have provided for a clear obligation. It might be that he thinks that the obligation would not help the process, but it might help those involved in the arbitration. I might revisit the amendment on Report, therefore, but at this stage I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 13 agreed to.

Clause 49 ordered to stand part of the Bill.

Schedule 14

Burial grounds: removal of human remains and monuments

Stephen Hammond: I beg to move amendment No. 60, in schedule 14, page 210, line 24, at end insert—
‘( ) If the remains were interred less than 25 years ago, the nominated undertaker shall make every reasonable effort to identify the relatives or personal representative of the deceased, and consult those people as to how the nominated undertaker proposes to carry out its functions under this Schedule with respect to the disposal of the remains or monument.’.
We now turn to the question of the construction of Crossrail affecting the burial grounds of human remains and monuments to the deceased. I am aware that the Select Committee considered a number of petitions about that and has carried out some excellent work. However, clearly the removal of burial grounds and monuments in order to make way for the construction of Crossrail is an important and sensitive issue, which the Bill tackles comprehensively. Paragraph 1(1) and (2) of schedule 14 requires the nominated undertaker to publish details of removals, and sub-paragraph (3) relaxes those rules when dealing with the remains of someone who died more than a century ago. That appears to be appropriate.
My amendment, however, proposes an additional sub-paragraph that would change the rules when dealing with the remains of those who died more recently and would represent a more sensitive way of dealing with this very distressing matter. Twenty five years is a relatively short period for burials. I accept that no obligation could be placed on a nominated undertaker to take the approach proposed in the amendment when dealing with all interred remains. However, very little effort would be required in order for the nominated undertaker to find relatives of those interred more recently. They could refer easily to undertakers that performed the particular ceremony, church records or the electoral role. Rather than just placing a notice in a newspaper, a slightly more demanding obligation should be placed on the nominated undertaker in order to relieve some of the distress caused to the families of those interred less than 25 years ago whose remains will be removed to make way for the albeit necessary construction of Crossrail.

Brian Binley: I support the amendment. In fact I would go even further and, therefore, seek help from the Minister. Many people have moved out of London, many of whom came to Northamptonshire, on an overspill basis, 40 years ago. Many of their grandparents are the people we are talking about, but they might have died 40 or 50 years ago. Although I recognise that there is a limit to what he can do for those people, will he rethink this scenario very seriously? It will impact immensely on sizeable numbers of Northamptonshire residents, and I am sure that the same goes for other counties. Will he be kind and give us and them some comfort in that respect?

It being One o’clock the Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned accordingly till this day at Four o’clock.